Citizens Advice published a report on 8 March 2023 recommending that the current system of household energy bill support be replaced with a new framework built around a social tariff. The report, Fairer, warmer, cheaper: new energy bill support policies to support British households in an age of high prices, was produced for Citizens Advice by the Social Market Foundation and Public First and was the culmination of a nine-month project1. An amended version was published on 9 March 2023 that corrected some typographical errors2.
The report concludes that the present system is "inadequate for an era of high energy bills" and "should be replaced", with a new policy framework in place by spring 2024 to form the basis of energy bill policy for the rest of the decade1. Its central proposal is a social tariff under which households spending an excessive proportion of their income on energy receive targeted support. Eligibility would be based on household income and household energy consumption, with receipt of means-tested benefits as one qualifying condition but not the only one, so that low-income households not claiming benefits also qualify2. Eligibility would be determined by the state without any application from households, and the tariff delivered by energy suppliers2.
The proposed eligibility mechanism would match HMRC Real Time Information on taxpayer incomes with energy industry data on household consumption, shared with the Department for Energy Security and Net Zero, which would decide which households qualify and tell suppliers2. The report acknowledges doubts about the accuracy and timeliness of employee addresses in RTI data, but notes that the current Warm Home Discount eligibility mechanism already uses HMRC incomes data1. It recommends a lump sum payment varying by a formula taking in household income and energy use, and suggests that where annual bills are around £3,000, the social tariff should deliver support of around £900 to the typical eligible household2. Funding should come from general taxation rather than levies on energy bills2. The Warm Home Discount would be folded into the new mechanism and cease to exist as a standalone policy2.
On energy efficiency, the report recommends significantly expanding the ECO regime, with ambitions that could include loft and cavity wall insulation for all fuel-poor households. It estimates an aggregate capital cost of £1.1 billion and average annual bill savings of more than £550 for a fuel-poor household where both loft and wall improvements are carried out2. Funding for the expanded ECO regime would continue to be raised through on-bill levies2.
"A new policy framework should be in place by spring 2024 and form the basis of energy bill policy for the rest of this decade."
| Proposal | Detail given in the report |
|---|---|
| Social tariff support level | Around £900 for the typical eligible household where annual bills are around £3,0002 |
| Social tariff funding | General taxation, not levies on energy bills2 |
| Eligibility basis | Household income and household energy consumption2 |
| Eligibility determination | State-determined, no application needed; delivered by suppliers2 |
| Warm Home Discount | Folded into the social tariff; ceases as a standalone policy2 |
| Expanded ECO ambition | Loft and cavity wall insulation for all fuel-poor households2 |
| ECO capital cost | £1.1 billion aggregate2 |
| ECO bill savings | More than £550 a year where both loft and wall improvements are carried out2 |
| ECO funding | On-bill levies, consistent with the current approach2 |
Why it matters for households
The report addresses the gap between universal support, such as the Energy Bill Support Scheme payments, and means-tested help such as the Warm Home Discount, which requires households to meet qualifying criteria and in some cases to act. Under the proposed social tariff, support would follow automatically from income and consumption data already held across government and the energy industry, so a household would not need to apply or even know the scheme exists. For a home on a low income with high consumption, that changes the practical route to help with energy bills and debt in England, with parallel arrangements a matter for Scotland and Northern Ireland within their own markets. The insulation element goes further, because fabric improvements reduce the energy a home needs rather than the price it pays, which is the more durable route to energy independence for a household. The report's proposals sit alongside existing work by energy consumer bodies and the wider regulation and policy landscape, and the social tariff debate it feeds into remains live.
What happens next
The report sets spring 2024 as the date by which a new policy framework should be in place2. It does not argue for a fixed timetable for the insulation ambition, but says it can and should be delivered within the lifetime of a normal Parliament2. No government response to the report is recorded in the sources.
Sources2 cited
- Fairer, warmer, cheaper: new energy bill support policies to support British households in an age of high prices - Citizens Advice, citizensadvice.org.uk
- Fairer, warmer, cheaper: new energy bill support policies to support British households in an age of high prices - Cyngor ar Bopeth, citizensadvice.org.uk